Car Lease vs Buy Calculator
Compare the total cost of leasing vs buying a car to make the best financial decision. Analyze monthly payments, total costs, and long-term financial impact for your vehicle choice.
Vehicle & Terms Information
Lease Terms
Multiply by 2400 to get APR equivalent
Buy Terms
Lease vs Buy Comparison
Understanding Lease vs Buy Decisions
Choosing between leasing and buying a car is one of the most important financial decisions you'll make. Both options have their advantages and disadvantages, and the best choice depends on your driving habits, financial situation, and long-term goals. Understanding the total cost implications helps you make an informed decision.
Leasing Advantages:
- Lower Monthly Payments: Typically 30-60% lower than loan payments
- Newer Vehicles: Drive a new car every 2-3 years
- Warranty Coverage: Most repairs covered under warranty
- No Depreciation Risk: Don't worry about vehicle value loss
- Tax Benefits: Business use may offer tax advantages
- No Trade-in Hassles: Simply return the vehicle at lease end
Buying Advantages:
- Ownership: You own the vehicle outright after loan payoff
- No Mileage Restrictions: Drive as much as you want
- Customization: Modify the vehicle as desired
- Long-term Value: Potential to build equity in the vehicle
- No End-of-Lease Fees: Avoid wear and tear charges
- Flexibility: Sell or trade-in anytime
Key Factors to Consider:
- Driving Habits: High mileage drivers may prefer buying
- Financial Goals: Short-term vs long-term financial planning
- Vehicle Preferences: Desire for new vs. owned vehicles
- Tax Situation: Business use considerations
- Credit Score: Affects both lease and loan rates
- Market Conditions: Current interest rates and incentives
How to Use This Calculator:
Enter the vehicle price, lease terms, and loan terms to compare the total cost of both options. The calculator will show you monthly payments, total costs over time, and help you understand which option makes more financial sense for your situation.
Frequently Asked Questions About Lease vs Buy Decisions
Is it better to lease or buy a car in 2024?
The lease vs buy decision depends on your driving habits, financial situation, and preferences. Leasing offers lower monthly payments and newer vehicles, while buying provides ownership and long-term value. Our calculator helps you compare the total costs of both options based on your specific circumstances.
How do I calculate the true cost of leasing vs buying?
True cost includes monthly payments, down payments, fees, maintenance, insurance, and end-of-term costs. For leases, include acquisition fees, disposition fees, and potential mileage penalties. For buying, include depreciation, maintenance, and eventual sale value. Our calculator provides a comprehensive comparison.
What are the pros and cons of car leasing?
Leasing pros: Lower monthly payments, newer vehicles, warranty coverage, no depreciation risk. Leasing cons: Mileage restrictions, wear and tear fees, no ownership, continuous payments. Our calculator shows the financial impact of these factors.
What are the pros and cons of buying a car?
Buying pros: Ownership, no mileage restrictions, customization freedom, potential equity. Buying cons: Higher monthly payments, depreciation risk, maintenance costs, trade-in hassles. Our calculator helps you weigh these factors financially.
How much should I put down when leasing vs buying?
For leasing, down payments are typically $0-$3,000 and reduce monthly payments. For buying, down payments of 10-20% are recommended to avoid negative equity. Our calculator shows how different down payments affect monthly costs and total expenses.
What happens at the end of a car lease?
At lease end, you can return the vehicle, buy it for the residual value, or lease a new vehicle. You may face charges for excess mileage, wear and tear, or disposition fees. Our calculator includes these end-of-lease costs in the total comparison.
How do mileage limits affect lease vs buy decisions?
High-mileage drivers (15,000+ miles/year) typically benefit from buying, while low-mileage drivers may prefer leasing. Mileage penalties can add significant costs to leases. Our calculator helps you determine the optimal choice based on your driving habits.
What is the break-even point for lease vs buy?
The break-even point is when the total cost of buying equals the total cost of leasing. This typically occurs after 3-5 years, depending on vehicle depreciation and lease terms. Our calculator shows this timeline to help you make the best long-term decision.